As a business owner, it is essential to be aware of the shipping charges from the factory to your door.
An important – but often overlooked component of starting a brewery is understanding the overall shipping charges that will incur, if you choose to order equipment from overseas.
Let’s say you order two pieces of equipment that can fit into a 40’ GP container. However, due to a shipping price change, that container becomes $8,000 instead of $5,000.
This can be quite a hit to the bottom line.
To grasp how important brewery equipment shipping costs are, it is helpful to understand the basic components of the shipping process.
This way you know what to look out for – and what to avoid, if you can!
Brewery Equipment Shipping Costs – Understanding Incoterms
Incoterms are selling terms that break down the responsibilities during the shipping process.
- Ex-Works/Ex-Warehouse (EXW): The manufacturer is responsible for packing and loading the products, but the responsibility for exporting, shipping, and importing the shipment falls on the buyer.
- Free on Board (FOB): The manufacturer will deliver the shipment to the desired port of loading and get the shipment on board.
- Cost Insurance and Freight (CIF): The manufacturer will load the shipment on board the vessel and pay the insurance associated with shipping.
- Delivered at Place (DAP): The manufacturer is responsible for all aspects of shipping, except for Customs importation and unloading at your desired destination.
Understanding these will let you know where the responsibility lies between buyer and seller. For more information – read this article.
We base our quotations on the size of the shipment, usually in terms of how many containers are needed and their size.
Shipping charges vary from country to country. Below is some information about brewery equipment shipping costs for Australia and the US.
Duties and Taxes for Brewery Equipment – Australia
All shipments in Australia are subject to Import Duty, Customs Import Charges, and Goods and Service Tax (GST). This cost must be paid before your shipment is cleared by Customs. These charges will be charged via your chosen freight forwarder to be paid before the shipment arrives.
Below is a breakdown of the charges due to Customs when importing:
- Import Duty: This is a tax collected on imports and some exports by a country’s customs authorities. A good’s value will usually dictate the import duty. Depending on the context, import duty may also be known as a customs duty, tariff, import tax, or import tariff. Luckily Australia and China have the China–Australia Free Trade Agreement (ChAFTA). This means that by us providing you with a Certificate of Origin, the goods are duty-free.
- Custom Import Charges: In Australia, these charges include Customs charges and DAWE (Quarantine) Charges which are applicable for every shipment.
- GST: A value-added tax that is currently set at 10% of the commercial invoice value and shipping costs combined. This amount can be claimed back if your business is registered for GST. However, please note that GST reporting typically only occurs every 3 months.
a) Commercial Invoice Value: The total price of the product(s) included in the shipment as per the manufacturer’s invoice. It is important to note that this value is based on the destination country’s currency, not the currency of where it was sold.
b) Shipping Costs: The direct costs associated with moving your products from the factory to your door. This includes packing the products into the shipping container, moving that container to the wharf to be loaded, overseas freight, insurance for the shipment, and any import duty that may be payable.
Duties and Taxes for Brewery Equipment – United States
Here are the things you need to consider for brewery equipment shipping costs in the US.
- Entry Fee: Used towards getting all required paperwork ready for the shipment’s entry into port.
- Importer Security Filing (ISF) Fee: a Customs and Border Protection (CBP) requirement for all ocean cargo imports to the United States for security purposes.
- ISF Bond: Only applicable if choosing to pay the single entry bond instead of the continuous bond.
- U.S. Customs Bond: There are two options to pay this fee, as outlined below.
a) Single Entry Bond: $5.75 per $1,000 of the shipment value with a minimum of $55.00. There is also a placement fee of $41.00
b) Continuous Bond: annual fee of $575.00. This amount covers a full year and is more economical because of the high-value shipments. Once your commercial invoice value reaches over $100K, this option becomes more economical.
- Handling Fee: Covers the unloading of your containers off the vessel.
- Messenger Services: Covers the sending of documents via a courier service.
- Additional Classifications: After the first one, each additional classification is $3.00.
- Merchandise Processing Fee (MPH): 0.3464% of your shipment’s total value – not including duty, freight, and insurance charges. There is a minimum fee of $27.23 and a maximum fee of $528.33
- Harbor Maintenance Fees (HMF): 0.125% of the commercial invoice value used by CBP to maintain all ports.
- Duties and Tariffs: The amount charged will be based on the HTS code of your shipment.
a) Brewing Equipment – 8438.40.0000: 2.3% general duty rate. Also has Section 301 tariffs, List 4A, 7.5% effective as of 2/14/20
b) Keg Washers – 8422.20.0000: free general duty rate. Also has Section 301 tariffs, List 1, 25% effective as of 7/6/18
c) Kegs (≤30L) – 7310.29.00XX: free general duty rate. Also has Section 301 tariffs, List 3, 25% effective as of 5/10/19
d) Kegs (＞30L) – 7310.10.00XX: free general duty rate. Also has Section 301 tariffs, List 3, 25% effective as of 5/10/19
Need help calculating shipping costs for your brewery equipment?
At Bespoke Brewing Solutions, we pride ourselves on helping our customers with every step of building their brewery including identifying all costs to get their order delivered.
We have also created a calculator to provide an overview of the charges you will incur when shipping from China to Australia or the United States. You can download it here for free!
Please note that this is a guide only and actual costs may vary depending on the freight forwarder, carrier, destination, etc. as they all will impact shipping costs and therefore duty and taxes.
If you have any questions at all regarding the shipping process, get in touch.
We would be happy to walk you through the process.
Disclaimer: The material and information contained in this blog is for general information purposes only. While we attempt to keep this information up to date and accurate, Bespoke Brewing Solutions makes no representation or warranty as to the accuracy, completeness, reliability, suitability, or availability with respect to the blog. Please work with your freight forwarder for an accurate breakdown of shipping costs.
